ForexLive Americas FX news wrap: Dollar defies payrolls miss

Forex news for New York trading on September 2, 2016:

• US August non-farm payrolls +151K vs +180K expected


• US trade balance for July -39.5B vs -41.1B estimate


• US July factory orders +1.9% vs +2.0% expected
  


• Canada July trade deficit 2.49B vs 3.30B exp


• Canada Q2 labour productivity qq -0.3% vs -0.4% exp


• Markit US services index released early


• Fed's Lacker brushes off jobs report, said rates should be higher
  


• Fed's Lacker Q&A: August payroll report was 'reasonably strong'


• Baker Hughes US oil rigs 407 vs 406 prior


• Atlanta Fed bumps up GDP forecast, NY Fed leaves estimate unchanged


• Goldman Sachs raises odds of September hike after jobs report


• SNB's Zurbruegg: Negative rate policy is necessary and working


• ISM New York current conditions 47.5 vs 60.7 prior


• Bill Gross: September isn't a sure thing but it's close

Markets:

• Gold up $11 to $1325


• WTI crude up $1.15 to $44.31


• S&P 500 up 9 points to 2180


• US 10-year yields up 3 bps to 1.60%


• CAD leads, JPY lags

The kneejerk was lower on the non-farm payrolls trade but, as is often the case, the kneejerk was wrong. The dollar completely reversed in the following hours and hit session highs ahead of the London close before limping along in the final hours before the US long weekend.

The jobs data was certainly a disappointment but there was no agreement on whether it was enough to spook the Fed. The probability of a hike in the Fed funds futures market fell to 32% from 36% before the report.

That doesn't help to explain the movement of the dollar where there were certainly dip buyers. USD/JPY was first to reverse. It fell 70 pips to 102.80 on the release but stormed to 104.32 at the highs before finishing near the figure.

EUR/USD jumped to 1.1250 from 1.1200 on the data but then fell a full cent from the highs. Repeated attempts to break 1.1150 weren't able to crack it as demand mounts.

Cable was impressive once again. Pound buyers fought hard to maintain gains after the jobs report. GBP/USD jumped 75 pips on the release and held there for a few hours before giving back about 55 pips of the gains and finishing at 1.3295. The pound was the best performer on the week.

The day, however, belonged to CAD where a beat on July trade data and a rebound in oil prices was able to counteract broad USD buying. USD/CAD slumped to 1.3020 from 1.3100 initially then extended declines to as low as 1.2980 later in the day. Be careful trading this pair Monday with Toronto and New York both on holiday.

AUD/USD was caught in the USD chop. It rose quickly to 0.7615 from 0.7550 as stops were flushed but it almost-instantly gave back 20 pips and then went on to give up all the gain and more before a late rise to 0.7670.

The problem with selling dollars, as it has been the case for some much of the year, is that you need to buy something else and it seems that everything else is lacking.

Thanks for reading and have a great weekend.

ForexLive Americas FX news wrap: Dollar defies payrolls miss
ForexLive Americas FX news wrap: Dollar defies payrolls miss
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